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Fuelling the energy debate – firelighter or damp twig?

Tim Yeo MP, Chair of the House of Commons Energy and Climate Change Select Committee, has a vision for the UK’s energy system in 2030: low cost renewable electricity with energy storage, consumers changing their energy use in response to price signals, carbon dioxide captured from fossil fuel power stations, affordable nuclear power, and an effective market mechanism to price greenhouse gas emissions. He remains optimistic that this can be achieved “if government makes the right choices”.

The UK has been a leader on ‘visions’ when it comes to climate and energy policy, for decades. We can think of this as policy leadership, but a vision without a credible strategy and plan of how it can be achieved renders it rather meaningless. So, choices do have to be made. The discussion at the launch of the Select Committee’s latest report ‘Fuelling the debate’[1] showed just how big the decisions are that need to be taken, but disappointed in the range of options being considered.

The report looks at future challenges and opportunities for energy in the UK, based on a call for evidence issued last year. Contributors were given just 500 words to outline their priorities for the next Parliament. The Birmingham Energy Institute submitted evidence highlighting five key issues:[2]

New thinking for energy markets: decentralisation and new technologies could significantly disrupt current business models.

Nuclear: UK industry and energy system could benefit from the accelerated development of Small Modular Reactors.

Innovation mechanisms: the UK can be a leading global player with well-placed investment from research to demonstration.

Public engagement: there has been a distinct lack of wider discussion about the issues we are facing, which could lead to a rejection of policy by the public.

The Committee distilled over 90 submissions into three areas: (i) maintain political stability and leadership; (ii) support and promote new technologies; and (iii) build consumer trust.

Whilst these are all entirely laudable, the scale and nature of the transition to a low carbon economy would seem to need a good deal more ambition. There are just three Parliaments left before we need to have largely decarbonised electricity generation and have made the expensive infrastructure decisions which set us on the pathway to 2050.

Going in to the election, there is a consensus between the main three parties that climate change needs to be mitigated by reducing emissions. Depoliticizing energy can be helpful to bring forward much needed investment. But the danger is that thinking does not evolve, incumbents dominate and we find ourselves with an inefficient system based on the current paradigm which makes the 2050 target of an 80% reduction in emissions (which is ultimately what we need to meet) harder and more expensive to achieve.

In the early 2020s we could have government backing for new nuclear plants and off-shore wind, generating centralised large-scale low marginal cost electricity. But alongside this, wide uptake of unsubsidised solar PV, district heat networks and ‘smart’ energy technologies may also be growing in significance, bringing the focus to a much more local level.

Continuing to frame the debate around electricity, utilities which profit from increased demand and a centralized policy approach is to ignore alternative scenarios which could deliver benefits for the environment, industry and public. The Committee on Climate Change notes that current policies focused on meeting 2020 targets will not reduce emissions enough over the longer term. The next Parliament must look deeper at our energy future through the 2020s and beyond, and charts a pathway for policy and regulation that opens up rather than restricts opportunities.